Franchises present unique valuation challenges
Abstract: In many respects, valuing a franchise is just like valuing any other type of business, but it also requires a valuator to consider several factors unique to the franchise business model. This article summarizes these factors, focusing on valuation of a “single-unit” franchisee. It mentions the importance of analyzing the franchise agreement and looking at factors that may either add to or diminish a franchise’s value. A sidebar warns against accepting market multiples without close analysis.